If Yer Gonna Raise the Bar, Then Raise the Whole Saloon

Interestingly enough, just after I wrote about the problem of too many real estate agents overall, I found a post by Dave Phillips over at Bloodhound Blog called “Raising the Bar or Bellying Up to It“. It’s insightful and hilarious. Recommended reading for sure.

I’m thinking, what’s all this Sam Adams reference? This is no time for mere beer. Move over, Sam, and meet my friend Jose Cuervo. As Tracy Byrd might sing:

Then after Three rounds with Jose Cuervo I let her lead me out on the floor And after Four rounds with Jose Cuervo I was showing off moves never seen before

Well, round five or round six I forgot what I came to forget After Round seven, Or was it eight? I bought a round for the whole dang place

Beer ain’t gonna do it when you’re looking to “beat an old memory”; and half-measures won’t cut it when you’re looking to change fundamental infrastructure of the entire industry. As Charles Woodall mentioned in the comments to my previous post, it takes 15 times the education to get a license to cut someone’s hair than it does to get a real estate license in Alabama. o.0

In any event, Dave brings up some great points and questions, ultimately concluding that this won’t be easy. The two common approaches — education and disclosure — won’t work, in his view, because governments are constantly raising the bar themselves, making the REALTOR designation sans meaningful differentiation from the vast hordes of unwashed real estate agents.

So, what is the solution? Do we think up a whole bunch of things that REALTORS® have to do or disclose that a common licensee does not? Maybe we could require REALTORS® to disclose that the neighbor will throw potatoes at you if you purchase this home? Or maybe we require REALTORS® to disclose all the future development plans within a mile of the property. (E&O Insurance companies will love that one.)

Maybe more disclosure is not a good idea. “Another Sam, please.”

Time for round one with Jose Cuervo.

If I were advising NAR, which I am not except in that “free advice is worth what you paid for it” sorta way, here’s what I might suggest: require that a REALTOR disclose everything that he would find material and pertinent if he himself were the buyer in the transaction.

In other words, the standard of behavior for the REALTOR should reflect the true meaning of the term “professional”: someone who is following a profession or a calling. This is a meaning that is continuously lost over time. There is a deep sense among the traditional professions of Divinity, Law, and Medicine that a professional works not for oneself, or even for one’s client, but for society as a whole. As a lawyer, I am an “officer of the court”. If I were practicing law, I would have responsibilities that extend beyond myself and beyond my clients to the entire judicial system, and to the polity and society as a whole. For example, no matter how much it would benefit my client, I am not to lie in a judicial proceeding or be party to a lie being told with my knowledge. The penalty for violating this is pretty severe — usually the loss of the license to practice law.

The reason why society (should) give me power and honor and prestige as a lawyer is directly related to the fact that in some real significant way, I am putting society’s interests ahead of my own. Granted, in today’s America, this sense of obligation to society as a whole has been lost in the legal profession for the most part, with idiots mouthing ‘zealous advocacy’ as the excuse for gaming the system and filing all manner of frivolous lawsuits and so on. But at the heart of the legal profession is the idea that we work for society, not for our particular client.

Same thing with a medical doctor. Even if she pays her bills with money from her own patients, she isn’t supposed to walk by an injured stranger, or turn away the sick. She owes a moral duty (if not a legal one) to society to heal the sick and help the injured. Because she puts society’s interests first, society in turn grants her status, power, and (sometimes) wealth.

If a REALTOR means anything at all, it has to mean a true professional real estate agent. That means understanding that they owe some sort of duty to society as a whole.

It does not benefit society for a REALTOR to refuse to disclose facts that he himself would find pertinent if he were the buyer of the property. That may benefit the seller, and therefore the REALTOR who is making money on commissions, but society as a whole is actually hurt by such behavior. It does not benefit society for a REALTOR to agree to represent a property at a price that he himself, in his professional expert opinion, believes to be seriously overpriced in the hopes that he can find some fool willing to overpay. When REALTORS complain that their seller clients simply are being stubborn and won’t listen to reason, I confess very little sympathy. As a professional, you are supposed to walk away and let the unscrupulous, uneducated, unprofessional merely-licensed agents deal with that trash.

So if all future development plans within a 5 mile radius of the house would be relevant to a buyer, then the REALTOR should disclose the information. If his seller client will not agree to disclose, then REALTOR should walk away and recuse himself from representing such a seller.

There is no other way. You can’t hold yourself to the highest standard of ethics and behavior while continually representing clients who are not. A client willing to cheat a buyer (morally, ethically, if not legally) to make a few bucks is not a client that the REALTOR should be representing.

How about education? We could require REALTORS® to take more education than a standard licensee. In Virginia, at the request of the REALTOR® organization, the General Assembly just increased the required hours of continuing education for all licensees to 16 hours and brokers to 24 last year. Hmm. Sounds like some more of that rising tide thing again. Man, all these Sam Adams and talk of rising tides gives me a strange urge to toss a box of tea in the harbor.

“Hey, beer me.”

Round two with Jose Cuervo.

16 hours to 24 hours of Continuing Ed? That may or may not be all that impressive, but how about NAR start with this:

To become a REALTOR, you must be a four-year college graduate, have an MBA or equivalent, and have completed a two-year program in Real Estate at a NAR-accredited institution. You must have worked for a minimum of two years as a real estate professional in a REALTOR-designated broker’s office. In addition, you must pass a NAR Professional Board Exam every two years covering topics in Real Estate Law, Finance, Property Valuation, Economics, Data Analysis, and Ethics.

That might put a bit of a crimp on that 1.3 million REALTOR number, wouldn’t it?

Sure, as David points out, if some state licensing agency makes the standard for all licenses to be the same as the above, a rising tide would lift all boat… except that a stringent requirement like this one would exponentially reduce the number of people applying for a real estate license in the first place.

When reasonable folks talk about increasing education requirements, I’m sure they don’t mean jump to extremes like this. Well, I’ve gone a few rounds with Jose Cuervo, and feel no compunction to be reasonable. Rather, let me ask, Why not? Why not lift not just the bar, but the whole damn saloon? Why not make it such that only the finest, the most dedicated, the most professional, the most ethical, and the most passionate of those who want to help people fulfill their dreams of homeownership make it through?

Yeah, I know why not: money. I’m not so naive as to believe this will be easy or even desirable to many who are already in the industry. I agree on the degree of difficulty being somewhere north of a quadruple salchow while wearing combat boots. But I merely point out that things can be done, if the will to do them exists.

And I do agree, in the last analysis, with David on a couple of concrete ideas:

Actively police REALTORS® for violations of the Code, license law, bad business practices and bad service. Bust’em and kick out the bad ones.

This is not going to be easy. Is it worth the effort? Probably. Will it get done? Probably not. Is it time for me to tell Sam goodnight? Goodnight Sam.

Enforcement is an absolute must. Lawyers are in our sorry state as a profession because State Bars have become so lax in enforcing its own laws, and judges have become part and parcel of the lawyer interest group. Self-interest and greed almost always takes over any powerful organization. But with proper enforcement, perhaps that fate was not unavoidable. Upholding the notion of the practice of law (or the practice of real estate) as a societal good, as an honor and a calling, instead of just a way to make a buck or two is critical to rediscovering the soul of what it means to be a professional.

And yes, this is not going to be easy. It probably won’t get done. It is worth the effort. And it’s round three with Jose Cuervo, and being a lightweight alcoholically speaking, it’s time for me and Jose to part ways.

Managing Partner of 7DS Associates, and the grand poobah of this here blog. Once called "a revolutionary in a really nice suit", people often wonder what I do for a living because I have the temerity to not talk about my clients and my work for clients. Suffice to say that I do strategy work for some of the largest organizations and companies in real estate, as well as some of the smallest startups and agent teams, but usually only on projects that interest me with big implications for reforming this wonderful, crazy, lovable yet frustrating real estate industry of ours.

12 Comments

Join the discussion and state your opinion. Some comments may be held in moderation. I try to get to them as soon as possible, but may be traveling or unable to approve comments immediately. I do not censor comments, but reserve the right to remove anything that looks like spam, trolling, or just outright inappropriate.

Jose, or no Jose, where does the impact of the marketplace fit in the scenario of raising the whole saloon? Oh, I understand – that was tongue-in-cheek (wink, wink). As I’ve commented on this topic elsewhere, no matter how we, or anyone at NAR, would like to see it happen, we cannot legislate superior service. Agents get the clients they deserve, and clients end up with the agents they deserve. I’ll just let the marketplace sort it all out.

Jose, or no Jose, where does the impact of the marketplace fit in the scenario of raising the whole saloon? Oh, I understand – that was tongue-in-cheek (wink, wink). As I’ve commented on this topic elsewhere, no matter how we, or anyone at NAR, would like to see it happen, we cannot legislate superior service. Agents get the clients they deserve, and clients end up with the agents they deserve. I’ll just let the marketplace sort it all out.

Nice blog Rob. It’s true, I am dealing with West Toronto homes and unprofessional realtors haven’t became extinct specie here too despite this market is very competitive and developed. The next turn is on customers I believe. If they will be choosing only the right ones and the bad name of others will spread quickly, there is chance to improve whole realtor profession…maybe

Nice blog Rob. It’s true, I am dealing with West Toronto homes and unprofessional realtors haven’t became extinct specie here too despite this market is very competitive and developed. The next turn is on customers I believe. If they will be choosing only the right ones and the bad name of others will spread quickly, there is chance to improve whole realtor profession…maybe

That’s a great point, West. I can’t blame realtors alone — fact is, customers and clients need to return the professionalism with loyalty. There’s no point in going through all the training and so forth if that doesn’t result in greater respect, greater income, and greater control.

When customers act like their advisors/fiduciaries are mercenaries instead of trusted partners, they will live up to those expectations. So it has to be a two-way street.

That’s a great point, West. I can’t blame realtors alone — fact is, customers and clients need to return the professionalism with loyalty. There’s no point in going through all the training and so forth if that doesn’t result in greater respect, greater income, and greater control.

When customers act like their advisors/fiduciaries are mercenaries instead of trusted partners, they will live up to those expectations. So it has to be a two-way street.

Your comment was caught by Akismet, so this didn’t go up in time. Sorry about that.

I tend to agree with you generally, but there is something that NAR can and should do: enforce higher standards. The reason is that while the market will sort it out, along the way, the market will associate ALL Realtors with the bad ones. It’s just how the human psychology works.

Your comment was caught by Akismet, so this didn’t go up in time. Sorry about that.

I tend to agree with you generally, but there is something that NAR can and should do: enforce higher standards. The reason is that while the market will sort it out, along the way, the market will associate ALL Realtors with the bad ones. It’s just how the human psychology works.